WEEK 13

WEEK 13

e-Supply Chain: Procurement and Fulfillment e-Services

Synopsis

Supply Chains are being transformed by e-Services. Competitive strength is now being measured -- at least partially -- on "my supply chain vs. your supply chain." Distributed information technology potentially makes possible the evolution of supply chains into "real-time business ecosystems" that facilitate the continuous monitoring of stock levels, and dynamic responses to shifts in inventory across the whole supply chain. This is envisioned to improve the procurement and fulfillment processes of organizations, allowing them to "seamlessly execute." Supply chains built upon e-Services appear to work well for some products and manufacturing processes, and appear to be a disastrous strategy in other contexts.

Readings

This short article provides a quick history of SCM. Quite interesting in hindsight, given the estimated growth rates of a year ago. Note the admission that no one has really totally figured out electronic service based SCM.

“High Times on the Backend,” Business 2.0, January 1, 2000.

http://www.business2.com/content/magazine/indepth/2000/01/01/20577

Another short article. Provides a vision of the future supply chain, and the roles of SCM, extended SCM, and SMEs. The concepts provide a nice setup -- many parallels -- for the Li & Fung case.

(Required) Fingar, P., “Transforming the Supply Chain,” Logistics Management and Distribution Report, April 1, 2000

Adapted from “E-Commerce Applications: Extended Supply Chain Management,” Enterprise E-Commerce, Meghan-Kiffer Press, Tampa, FL, 2000.

http://www.manufacturing.net/magazine/logistic/archives/2000/lm0401.00/sup/041transform.htm

This article provides an overview of the potential advantages, potential pitfalls, and parts involved in Web-based supply chains. The extra links below are additional article segments that were in the magazine article ("A Parts List"), and that summarize all of the supply chain articles on eCompany.com (the "Web File"), and are interesting to browse through..

Mount, I., and B. Caulfield, "The Missing Link: What You Need to Know About Internet Supply Chains," eCompany Now, May 2001, p. 82-88.
http://www.ecompany.com/articles/mag/0,1640,11253,00.html
"The Internet-Based Supply Chain: A Parts List" -- http://www.ecompany.com/polls/0,,11279,00.html
eCompany's Supply Chain Web File -- an in-depth list of supply chain components and links -- http://www.ecompany.com/webfile/0,1638,11253,00.html

This opinion article provides some nice perspective on the present effect of Internet-based procurement, the relative value of dot-com vs. non-dot-com procurement approaches, and insightful information about IBM's results with Internet-based procurement to date.
(Required) Fitzgerald, K., "e-Procurement at 100 mph," Supply Chain Management Review, May/June 2000.
http://www.manufacturing.net/magazine/scl/scmr/perspective/perspective_mayjun_2000.html

Interesting article comparing (1) traditional furniture retailing supply chain to (2) e-retailing furniture supply chain, to (3) bricks-and-clicks supply chain, to (4) several other supply chain hybrids. Fundamental framework for analyzing supply chains is demonstrated. Interestingly, one of the e-retailers mentioned (HomeStore) has since closed and changed themselves into a e-service technology provider (http://www.scene7.com/) in collaboration with several existing manufacturers. They demonstrate all of their furniture demo technologies, in various contexts (clothing coordination, furniture layout, textile choice, etc.) -- beyond being fun to toy with, with technology like this, even I might be able to start coordinating my clothes and having aesthetically pleasing furnishings.
(Required) Pyke, D.F., Johnson, M.E., and P. Desmond, "E-Fulfillment: It's Harder Than It Looks," Supply Chain Management Review, January/February 2001.
http://www.manufacturing.net/magazine/scl/scmr/scm0118/efulfillment_1.html

This article describes the Automotive industry's attempt to build Covisint, an e-Service company, to manage its supply chain. This article provides a nice counterpoint to the Li & Fung case.

(Required) Baer, M., and J. Davis, “Some Assembly Required,” Business 2.0, February 20, 2001, p. 76-85.

http://www.business2.com/content/magazine/indepth/2001/02/12/26155

Related Readings – Not Required

Hagel III, J., and A. G. Armstrong, “Reversing Markets (Chapter 2),” in Net Gain, Harvard Business School Press, 1997.

Kalakota, R., and M. Robinson, “Implementing Supply Chain Management and e-Fulfillment,” e-Business 2.0, Addison-Wesley, Boston, MA, 2001, p. 271-306.

Kalakota, R., and M. Robinson, “Demystifying e-Procurement: Buy-Side, Sell-Side, Net Markets, and Trading Exchanges,” e-Business 2.0, Addison-Wesley, Boston, MA, 2001, p. 307-347.

Pricewaterhouse Coopers, “The Challenge of e-Supply Chain Management (Chapter 1),” in Information and Technology in the Supply Chain, 1999, p. 1-19.

Pricewaterhouse Coopers, “e-Procurement (Chapter 8),” Information and Technology in the Supply Chain, 1999, p. 111-125.

Sawhney, M., “Big Iron for Small Business: The Emergence of the MetaHub for Small Businesses,” Working Paper.

http://www.mohansawhney.com/Registered/Content/TradeArticle/metahubs.pdf (Must register for free account)

This article describes (at a practitioner level) where Operations Research can be applied in Internet-enabled supply chains.
Sodhi, M.M., "Applications and Opportunities for Operations Research in Internet-Enabled Supply Chains and Electronic Marketplaces," Interfaces, forthcoming.

http://www.informs.org/ebiz/interfaces

Upton, David M. and Andrew McAfee., “The Real Virtual Factory,” Harvard Business Review, July-August 1996, p. 123-133. (Also republished in: Tapscott, D., Creating Value in the Network Economy, 1999, Harvard Business School Press, p. 69-90.)

http://www.hbsp.harvard.edu/hbsp/prod_detail.asp?96410

Pricewaterhouse Coopers, “E-essentials – technology that drives the change (Chapter 10),” Information and Technology in the Supply Chain, 1999, p. 139-150.

Food Logistics, “Making the Invisible Visible: Technology’s Role in e-Supply Chain Collaboration,” September 1999.

Narayanan, V.G., and A. Raman, "Aligning Incentives for Supply Chain Efficiency," Harvard Business School Publishing, 9-600-110.
http://www.hbsp.harvard.edu/hbsp/prod_detail.asp?600011

"H. E. Butt Grocery Company: A Leader in ECR Implementation (B) (Abridged)," Harvard Business School Publishing, Case Study, 9-198-016.

http://www.hbsp.harvard.edu/hbsp/prod_detail.asp?198016

"Marshall Industries," Harvard Business School Publishing, Case Study, 9-899-239.
http://www.hbsp.harvard.edu/hbsp/prod_detail.asp?899239

"Li & Fung," Harvard Business School Publishing," Case Study, 9-301-009.

http://www.hbsp.harvard.edu/hbsp/prod_detail.asp?301009

"Harley-Davidson Motor Company: Enterprise Software Selection," Harvard Business School Publishing, Case Study, 9-600-006.
http://www.hbsp.harvard.edu/hbsp/prod_detail.asp?600006

"Ford Motor Company: Supply Chain Strategy," Harvard Business School Publishing, Case Study, 9-699-198.
http://www.hbsp.harvard.edu/hbsp/prod_detail.asp?699198

Sites

Supply Chain Management Review

http://www.scmr.com/

ManufacturingSystems.com
http://www.manufacturingsystems.com/

Logistics Management and Distribution Report

http://www.manufacturing.net/magazine/logistic/default.htm

Nistevo

http://www.nistevo.com/

A Minneapolis based dot.com company. Nistevo is a leading provider of web-based technologies for strategic procurement and execution of logistic services.

Case Study

Li & Fung

Overview

Li & Fung was founded in 1906. Now run by the grandsons of the founders, Li & Fung manages supply chains for many major label brands found throughout the world, such as The Limited and Abercrombie and Fitch. Yet, Li & Fung manufacture nothing themselves. According to one of the grandsons, "Li & Fung does not own any of the boxes of the supply chain, rather we manage and orchestrate it from above. The creation of value is based on a holistic conception of the value chain." However, Lee & Fung offer many supply-chain related customization services, including virtual manufacturing (product design) services.

Questions (FOR CONSIDERATION AND DISCUSSION -- YOU DO NOT NEED TO HAND THEM IN)

1. What operational performance dimensions are important in Li & Fung's operations?

2. What underlying philosophies and principles drove Li & Fung to create "customizable supply chain" services?

3. What are the strategic flexibility dimensions that Li & Fung have built into their supply chain services?

4. Who are the customers of the customizable supply chain services, and what is the value propositions posed to them?

5. How are service quality and customer satisfaction affected by the combined capabilities of Li & Fung's supply chain management and lifung.com? Will this system's affect on operational performance also affect customer satisfaction of external customers who come into contact with future customer-facing e-Services?